Toshiba to sue SK Hynix over industrial espionage

By Edd Gent

Published Friday, March 14, 2014

Toshiba has announced that it will sue South Korea’s SK Hynix for wrongful acquisition and use of the firm’s technical information.

The news comes a day after Japan’s Chief Cabinet Secretary Yoshihide Suga vowed to fight industrial espionage, following reports that police had arrested a former engineer at a Toshiba affiliate on suspicion of improperly providing technical data to SK Hynix.

The Japanese firm has now brought a civil suit against the Korean firm at the Tokyo District Court under Japan’s Unfair Competition Prevention Act, seeking damages for the wrongful acquisition and use of Toshiba’s proprietary technical information related to NAND flash memory.

“SK Hynix is a business partner of Toshiba,” Toshiba said in a statement. “However, the companies are also competitors in NAND flash memory, one of Toshiba’s core technologies, and given the scope and importance of the misappropriated technical data involved, Toshiba has no reasonable option other than to seek legal redress.

“Moving forward, Toshiba will construct a more robust system for protecting its intellectual property and preventing its loss, and respond resolutely to unfair competition, in order to maintain the advanced technical competence that is the source of its competitive strength.”

The NAND technology was pioneered by Toshiba in 1987 and is now jointly developed and produced with US firm SanDisk Corporation.

The firm said it filed the suit after learning that police had arrested a former employee of SK Hynix, who previously worked for SanDisk in a NAND flash memory development project conducted in partnership with Toshiba at Yokkaichi Operations, Toshiba’s flash memory technology development and mass production base in Mie prefecture, Japan.

The employee is alleged to have illegally taken Toshiba’s proprietary technical information in 2008, and to have subsequently provided it to SK Hynix.